First Thing Today (VIP) -- February 28, 2014

February 28, 2014 12:35 AM

Good morning!

Corn and wheat firmer, beans slightly lower... As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are steady to 2 cents lower, SRW wheat futures are 3 to 5 cents higher, while HRW and HRS wheat futures are fractionally to 3 cents higher in all but the March HRS contract, which is weaker. The U.S. dollar index is under pressure this morning.

Vilsack to discuss farm bill implementation... Ag Secretary Tom Vilsack will speak today at the Commodity Classic. He will likely provide more information about how and when USDA will implement some of the programs in the 2014 Farm Bill. In recent speeches he has focused on the livestock disaster aid programs of the new law. Vilsack will likely discuss how USDA is breaking down the bill into priority timelines and which areas will need proposed rules for public comment.

COFCO buys majority stake in Nidera... COFCO, China's state-owned grain trading firm, announced it has purchased a 51% stake in Dutch grain trading firm Nidera. No financial terms were disclosed, but Nidera is thought to be valued at around $4 billion.

Deliveries predictably light... Today marked the start of the delivery process for March grain and soy futures. As expected, deliveries were light at four contracts for corn, 17 contracts for beans, zero contracts for SRW wheat and one contract for soybean meal.

Yellen signals Fed will stick to tapering path... While wintry weather may be the culprit behind weaker-than-expected U.S. economic data, Fed Chair Janet Yellen told members of the Senate Banking Committee she wasn't convinced that was the case. While continued weakness could prompt the Fed to keep the asset purchase effort in place longer than currently expected, she downplayed the odds that would happen. "Asset purchases are not on a preset course, so if there's a significant change in the outlook, certainly we would be open to reconsidering, but I wouldn't want to jump to conclusions here," Yellen cautioned. In her earlier remarks, she signaled expectations the asset purchase effort would be wound down by this fall. Yellen's remarks came during questions from lawmakers at the second day of monetary policy testimony to Congress, delayed by a snowstorm that shuttered Washington, DC, Feb. 13.

Wholesale beef prices continue to surge... Volatility in the wholesale beef market has been off the charts the first two months this year. A surge to an all-time high in January was followed by a sharp price correction into mid-February and now prices are rallying sharply again. Choice and Select boxed beef prices surged in excess of $2 again Thursday, though movement was light at just 137 loads. Packers' ability (or inability) to move product will continue to determine when prices are too high or at value levels in this volatile environment.

Pork price rally continues... The pork cutout value was another $2.05 higher Thursday and though movement slowed to 305.68 loads, that's still respectable given the average carcass price is now $101.88. Even at that price, pork is still cheap compared to beef, which suggests packer demand may remain relatively strong.

Overnight demand news... Israel purchased 60,000 MT of optional origin corn, likely to be sourced from the Black Sea region.


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